The gift of time – SMEs to reward employees with 120m extra days off this Christmas as the cost-of-living bites
- Over half a million small and medium-sized enterprises (SMEs) are rewarding their staff with additional days of holiday allowance this festive season, totalling more than 120 million days across the UK
- 44 per cent of SMEs will be hosting Christmas parties, 41 per cent will be closing between Christmas and New Year and 25 per cent will be rewarding staff with Christmas bonuses
- However, this comes as nearly half (47 per cent) of SMEs report worries about their business prospects for next year as more than three in five (68 per cent) are concerned about the negative impact that rising energy bills will have on their business
- The quarterly Barclays SME Barometer combines billions of merchant transactions, processed by Barclaycard Payments, with research data to provide an in-depth look at the UK SME economy
Over half a million1 UK small and medium-sized enterprises (SMEs) are spreading Christmas cheer among their workforces this year by giving the gift of time, according to the latest quarterly Barclays SME Barometer2.
One in ten (10 per cent) of the nation’s 5.6 million SME businesses said they’ll be gifting each employee 2.5 extra days leave, on average, meaning that SME staff across the country will receive 120,345,602 days off cumulatively3. People working in hospitality and leisure (3.5 days additional holiday) and manufacturing (3 days) will get even more time off.
The Barclays research found that 41 per cent of SME employers believe staff activities leading up to the festive season contribute to employee retention. Similarly, a third (33 per cent) of consumers say they are less likely to look for another job if their employer organises activities to reward staff over the Christmas period. In fact, of employers who are seeing an increase in demand for benefits from new employees, more annual leave is one of the top three benefits being requested by existing employees, according to 28 per cent of small businesses, behind higher wages (87 per cent) and more flexible working (56 per cent).
In addition to providing time off, two fifths (44 per cent) of SMEs will be hosting end-of-year parties, spending an average of £56 per head on festivities, while 41 per cent will be closing offices between Christmas and New Year and 25 per cent will be awarding Christmas bonuses.
Q3 SME Revenues
Although data from Barclaycard Payments, which processes £1 in £3 of debit and credit card payments in the UK4, showed a slight decrease of 1.58 per cent in the value of card payments to SMEs from July to September 2022, compared to the same period in 2021, more than half (55 per cent) of SMEs reported their total revenue grew – with turnover up around 9.1 per cent year-on-year, on average.
51 per cent reported turnover growth in Q3 2022 against Q2 2022, consistent with data from Barclaycard Payments, which showed a minor increase of 0.27 per cent in the value and 1.62 per cent in the volume of payments made to SMEs between July and September this year.
Businesses expect growth to continue throughout the festive season, as over half of small businesses (51 per cent) predict a year-on-year revenue increase in Q4, and 49 per cent expect revenues to grow from Q3 to Q4 this year.
Festive cheer and optimism are, however, dampened by the cost-of-living crunch as nearly half (47 per cent) are worried about their business prospects for 2023.
Furthermore, more than three in five (68 per cent) of SMEs are concerned about the negative impact that rising energy bills will have on their business, with 26 per cent feeling very concerned.
Larger businesses are feeling the pinch too, with nearly two-thirds (59 per cent) predicting a decrease in consumer spending, and 41 per cent worrying about their businesses prospects as they approach 2023.
Colin O’Flaherty, Head of SME at Barclaycard Payments, said: “The upcoming festive period will be our first since the pandemic without restrictions, with both employers and employees looking to make the most of it.
“While it’s been yet another challenging year for businesses, many SMEs are looking to inject some festive cheer by rewarding their employees, as business owners are aware of the positive impact that employee morale can have on staff retention.
“Our research, however, shows that although owners are very aware of the difficulties to come, they remain resilient in the face of risings costs, and we hope this festive period allows them to celebrate their achievements and ring in the New Year with energy and a degree of optimism.”
Earlier this year, Barclays launched a package of support aimed at boosting small businesses, with the bank hosting 600 business masterclasses this year, focussing on managing cash flow, business growth and support for wellbeing. Find out more at labs.barclays/business-health-hub
Notes to editors
1 Sum: 5,583,245 SMEs in the UK x 10% = 558,325 SMEs who are giving their staff extra time off this festive period.
2 Barclaycard Payments commissions YouGov to conduct its quarterly SME Barometer research. This quarter’s study was conducted among 578 small and medium-sized business leaders and 202 larger businesses, with a nationally representative regional and industry sample, between 25th October 2022 and 1st November 2022.
3The average number of employees of those looking to allocate additional leave is 81. This is multiplied by the average number of days they’re giving off (2.65) which is 215. This is then multiplied by the estimated number of SMEs giving their staff extra days off (558,325) equalling 120,345,602. Source: https://www.gov.uk/government/statistics/business-population-estimates-2021/business-population-estimates-for-the-uk-and-regions-2021-statistical-release-html
4Barclaycard Payments transaction data processed by SMEs in the UK between 1st April 2022 and 30th June 2022, and 1st July 2022 and 30th August 2022, compared to the same periods in 2021.